Dodge Company makes two products from a common input. Joint processing costs up to the split-off point total $44,900 a year.
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June 20, 2020Dodge Company makes two products from a common input. Joint processing costs up to the split-off point total $44,900 a year.
Dodge Company makes two products from a common input. Joint processing costs up to the split-off point total $44,900 a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below:
Product X Product Y Total
Allocated joint processing costs $17,600 $27,300 $44,900
Sales value at split-off point $27,200 $37,200 $64,400
Costs of further processing $22,800 $19,600 $42,400
Sales value after further processing $44,100 $62,000 $106,100
What is the net monetary advantage (disadvantage) of processing Product X beyond the split-off point?
$30,900
$21,300
$3,700
($5,900)
